From Standard & Poor's Equity ResearchBARCLAYS UPGRADES AMAZON.COM TO OVERWEIGHT FROM EQUAL-WEIGHT
Barclays analyst Douglas Annuth says he thinks Amazon.com's (AMZN) business model is sound and its competitive position is actually strengthening during the current downturn as certain retailers close stores and have challenges obtaining inventory.
Annuth sees AMZN gaining share of both overall retail and e-commerce as the company focuses on its core tenets of user experience, broad selection and low prices. He notes that the company is not immune to broader macro pressure, but thinks it holds up better than most and its revenue and free cash flow growth should re-accelerate materially when consumer demand improves.
He raises $46 price target to $54.
GOLDMAN DOWNGRADES INTERSIL TO NEUTRAL FROM BUY
Goldman Sachs analyst Craig Hettenbach says in addition to large reduction in fourth quarter guidance, Intersil (ISIL) announced CFO Dave Zinsner is resigning to become CFO of Analog Devices (ADI).
Hettenbach notes that this follows reorganization on Sept. 11, 2008, where ISIL consolidated five product line groups into two, which led to some turnover of prior product line management. He believes uncertainty related to recent management change will be a near term overhang, leading to his downgrade.
He cuts $1.22 2008 GAAP EPS estimate to $1.10, $0.76 for 2009 to $0.39, $0.92 2010 to $0.54, and $12 6-month target to $8.
BAIRD DOWNGRADES ADOBE SYSTEMS TO NEUTRAL FROM OUTPERFORM
Baird analyst Steven Ashley says Adobe Systems (ADBE) fourth quarter fiscal year 2008 outlook was modest revenue shortfall and EPS beat; focus will be on first quarter fiscal year 2009 guidance which is well below the consensus forecast.
Ashley notes that first quarter revenues are expected at $800-$850 million, well below $931 million consensus and his $929 million estimate. ADBE expects to report fourth quarter revenue of $912-$915 million, vs. $930 million consensus and his $915 million estimate; non-GAAP EPS expected at $0.59-$0.60 (including $0.05 one-time tax benefit) vs. $0.51 consensus and his $0.50 estimate.
He raises $1.98 fiscal year 2008 (November) EPS estimate to $2.06, but cuts $2.05 fiscal year 2009 to $1.80. He lowers his $33 price target to $27.